Unlocking the power of the atom goes far beyond electricity generation; nuclear energy plays a pivotal role in various industries, ranging from desalination and hydrogen production to medical applications and process heating[1]. Despite the inherent risks associated with nuclear energy, the stringent safety measures implemented today underscore the industry's commitment to prioritising safety above all else. This often-maligned technology also has one of the most well-established energy and nuclear insurance markets, much of which stems from stringent and highly evolved safety and risk management programs.

While acknowledging the historical dangers, it's essential to recognise that the safety and risk protocols have evolved over decades, shaped by lessons learned from past incidents. At the forefront of global nuclear safety standards is the International Atomic Energy Agency (IAEA)[2], acting as a regulatory watchdog and nuclear auditor.

Brandon Scholtz, a risk consultant at Aon South Africa, emphasises the critical role of data and insights from previous nuclear incidents in shaping the legislative and regulatory frameworks governing nuclear activities today[3]. “As the industry continues to grow and evolve, non-negotiable safety measures, encompassing nuclear, fire and personal safety, ensure that nuclear systems remain remarkably secure. The dynamic landscape of nuclear energy and its applications is underscored by the industry’s unwavering commitment to safety that propels the industry forward,” says Brandon.

What is Nuclear Energy?

Nuclear energy is the power derived from the release of energy in the nucleus of an atom, composed of protons and neutrons. It exists in two forms: nuclear fusion and nuclear fission:

• Nuclear fusion - This occurs when atom nuclei fuse, releasing energy. It's the process that powers the sun and other stars. However, replicating nuclear fusion is currently not possible.
• Nuclear fission - In nuclear fission, a neutron collides with an atom's nucleus, causing it to split into smaller nuclei, releasing a significant amount of energy and more neutrons. These neutrons trigger a chain reaction, leading to the continuous release of energy over time. The released energy comes in the form of heat and radiation. Unlike fusion, nuclear fission is achievable and commonly used.

The heat generated from nuclear fission is utilised similarly to a coal power station. It heats water to produce superheated steam, which turns a turbine, ultimately generating electricity. Various types of nuclear power stations exist, employing different procedures but all aiming to achieve the same goal.

Nuclear technology plays a pivotal role in various aspects of our daily lives, particularly in the fields of medicine and agriculture. “In the medical realm, it proves invaluable for both diagnosis and treatment, employing radiopharmaceuticals. Meanwhile, within agriculture, nuclear technology finds application in pest control and sterilisation processes. Additionally, ionising radiation, utilising a Cobalt-60 source, is harnessed to treat spices and powders intended for consumer use. This method effectively eliminates contaminants in consumable items,” Brandon explains, illustrating some of the practical applications of nuclear technology.

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Risk Management in Nuclear Energy

The types of risk that nuclear energy is exposed to relate to the following:

• Safety: general plant and environment safety.
• Production: workforce, production and organisation.
• Financial/commercial: variables in terms of cost of resources, a competitive market for selling the finished product (electricity) and others.
• Geopolitical: current political or commercial environments.

“It is necessary to identify all the risks that pertain to the nuclear power plant. Each of these needs to be quantified for severity as well as ease of rectifying and then prioritised as to which needs to be completed first or requires the most resources. Defining these parameters and knowing how to approach them will dictate how we treat the risks,” Brandon explains. These include:

• Reduction actively makes changes to mitigate or remove the risk,
• Retaining the risk means that it is not financially feasible to mitigate or remove the risk, which means that the risk is essentially a ‘self-insured’ risk.
• Transferring the risk could either involve contractors to maintain or repair risks or transfer the risk if it is an insurable risk.

Safety and managing risk in the context of nuclear energy encompasses various aspects, with a primary focus on fire safety and personal safety. The overarching framework for ensuring safety is the Defence-in-Depth approach, which dictates the implementation of multiple safety systems to mitigate the impact of potential accidents. These include:

• The consideration for human error.
• Ensuring the effectiveness of physical barriers.
• Protection of the environment and public at large.

“The main approach to achieve this comprises a two-pronged approach, the prevention of accidents as far as possible and mitigating any potential damage or losses if prevention should fail,” says Brandon. 

Key considerations for nuclear and fire safety include the design and construction of facilities[4], the use of equipment to mitigate human errors, regular monitoring and testing of safety systems, multiple systems that achieve the same purpose but act as a backup system, control of reactivity within the plant and the implementation of cooling systems, among other mitigation measures. Software programs allow for remote monitoring, identifying faults at any time, inspection of various components, ensuring that they are always operating correctly and configuration management when components are replaced or modified. “These measures are essential to prevent, monitor and take appropriate actions in the event of any unforeseen incidents. And while the plant may change throughout its life cycle, the need for constant attention to risk management needs to be front and centre,” Brandon explains.

Physical barriers play a crucial role in containing heat and radiation within the nuclear plant. “The nuclear fuel is typically in solid form, stored in pellets within sealed fuel rods. These rods are then placed in a pressure vessel, often submerged in a coolant with variations depending on the type of nuclear reactor. The pressure vessel itself acts as a robust boundary, constructed with thick steel, sometimes up to 30cm in thickness. Beyond this, the entire design is enclosed in a substantial concrete containment structure with walls measuring one meter and up in thickness. Continuous monitoring of each of these barriers is conducted to identify and rectify any potential faults promptly,” he adds.

In addition to barriers addressing heat and radiation containment, the plant incorporates various fire protection measures. These include fire detection systems, sprinkler systems, physical barriers such as firewalls and fire sealing, as well as insulation. Each of these elements contributes to the overall safety infrastructure, providing information to operators and actively preventing the occurrence and spread of fires within the nuclear facility.

Managing risk and insurance in nuclear energy

In the dynamic landscape of nuclear energy projects, having a risk partner well-versed in leveraging both local and global markets becomes indispensable for crafting effective risk management and risk transfer solutions, complementing the mandatory core insurance.

Managing the risks around all areas of nuclear insurance includes a focus on areas such as construction and operating risks, liability insurance both within and in addition to international regimes, property exposures unique to nuclear activity, fuel-fabrication and fuel-enrichment coverage, decommissioning, cyber-attacks on critical nuclear energy infrastructure and reinsurance of alternate markets dealing with nuclear issues. Original exposures and coverages are unique for nuclear operators and nuclear service providers, making it essential to speak to an expert in the field,” Brandon concludes.

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Additional links used (for referencing):

• https://www-pub.iaea.org/MTCD/Publications/PDF/Pub1013e_web.pdf (ref1)
• https://www-pub.iaea.org/MTCD/Publications/PDF/te_1209_prn.pdf (ref2)